DCAA Compliance Blog

Your Source for DCAA News and Information for Contractors

ReliAscent® LLC is the only government contract accounting firm that specializes in all aspects of government contracting compliance. From our DCAA compliant accounting services, to monthly government contract accounting for all government agency awards, contract management & administration, and financial services & planning, our goal is to ensure the success of our clients, and all small business government contractors and grantees.

In our DCAA Blog, we discuss the latest government contracting news from the Federal Government, the DCAA, and DCMA, as well as promotions offered by ReliAscent, and helpful tools and resources for contractors.

We hope you will visit and take part in the discussions on our blog on a regular basis. If you ever have any questions or would like to discuss how our experts can help, do not hesitate to contact us at any time!

Many times when I talk with small businesses, they don't fully understand the difference between a Federal Grant and a Federal Contract. It is important for a small business to completely understand if their government funds are coming from a grant or a contract. The terms and conditions surrounding each have somewhat unique requirements that may have implications on how the business handles the award and, in particular, the accounting related to that award.

The Government defines the difference in fairly easy to understand terms (for the government) at the grants.gov website:

A Grant is an award of financial assistance, the principal purpose of which is to transfer a thing of value from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States (see 31 U.S.C. 6101(3)). A grant is distinguished from a contract, which is used to acquire property or services for the federal government's direct benefit or use.

So, in essence the Federal Government is expecting something to be delivered from a contract, either a good or a service. A grant, on the other hand, usually doesn't expect a deliverable. Pretty simple, right? Let's look at the SBIR program for a minute. There are 11 agencies with budgets; (Defense{DOD}, Health {NIH}, Energy {DOE}, Aeronautics & Space {NASA}, Science {NSF}, Agriculture {USDA}, Education {ED}, Homeland Security {DHS}, Transportation {DOT}, Environment {EPA} and Commerce {NOAA & NIST}). Of those 11 agencies, a little over half are what is called contracting agencies and the remainder are considered granting agencies (where most of their awards are grants, not contracts). Yet, the SBIR program is fairly uniform in it's objectives. The primary differences can be summarized as follows:

Contracting Agencies

Granting Agencies

Highly focused topics

Less specific topics

More fiscal requirements

More flexibility in use of funds

Procurement Mechanism for some agencies

Assistance mechanism

The requirements for the awardee's accounting system vary somewhat as well. While all the agencies tend to like the same type of job cost accounting system, some agencies are more strict about having the awardee follow complex guidelines in their accounting practices. Again, those tend to line up along the difference between contracting and granting agencies with contracting agencies expecting more from their awardees and going to greater lengths usually to verify this. It is fairly interesting to note the differences when comparing all agencies in a chart (based on 2012 numbers):

DOD

NIH

DOE

NASA

NSF

USDA

ED

DHS

DOT

EPA

NOAA/NIST

SBIR

X

X

X

X

X

X

X

X

X

X

X

STTR

X

X

X

X

X

Contract (CO)

Grant (GR)

CO

GR

(some CO)

GR

CO

GR

GR

GR

(some CO)

CO

CO

CO

CO

Approx SBIR/STTR

Budget

$1.1B

$717M

$188M

$162M

$151M

$19M

$13M

$13M

$9M

$5M

$5M

It is always best to check with an expert when a company moves from one agency to another for an award or from one type of award to another type of award. This will help ensure that the company can comply with all the government regulations and be successful.